Edison Electric Institute Financial Conference November 11 12, 2013 - PowerPoint PPT Presentation

Edison Electric Institute Financial Conference November 11 – 12, 2013

Cautionary Statements Regarding Forward-Looking Information This presentation contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, that are subject to risks and uncertainties. The factors that could cause actual results to differ materially from the forward-looking statements made by Exelon Corporation, Commonwealth Edison Company, PECO Energy Company, Baltimore Gas and Electric Company and Exelon Generation Company, LLC (Registrants) include those factors discussed herein, as well as the items discussed in (1) Exelon’s 2012 Annual Report on Form 10 -K in (a) ITEM 1A. Risk Factors, (b) ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations and (c) ITEM 8. Financial Statements and Supplementary Data: Note 19; (2) Exelon’s Third Quarter 2013 Quarterly Report on Form 10-Q in (a) Part II, Other Information, ITEM 1A. Risk Factors; (b) Part 1, Financial Information, ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations and (c) Part I, Financial Information, ITEM 1. Financial Statements: Note 18; and (3) other factors discussed in filings with the SEC by the Registrants. Readers are cautioned not to place undue reliance on these forward- looking statements, which apply only as of the date of this presentation. None of the Registrants undertakes any obligation to publicly release any revision to its forward- looking statements to reflect events or circumstances after the date of this presentation. 1 2013 EEI Conference

Setting the Context  Increasing natural gas production The current trends in the  Expanding renewable capacity industry…  Growing demand response and energy efficiency … are continuing to create  Low natural gas and power prices a challenging  Low load growth environment…  Lack of volatility  Asset optimization and rationalization  Leverage business model to identify and invest in growth areas … and Exelon is  Manage costs and improve efficiencies responding…  Advocate for policies that enable well-functioning competitive markets and create value for shareholders  Full impact of coal retirements is not currently reflected in the forward markets …while monitoring the  Significant number of coal plants need additional controls to comply with MATS power markets for  Forward market implied heat rates are trading at a discount to the spot market recovery.  Upside in both forward and spot markets as current heat rates move higher While we believe in market recovery, we are not waiting for it and are taking actions to improve our value 2 2013 EEI Conference

Exelon’s Strategic Response to the Current Environment Asset Optimization Growth Investments Cost Management Utilities Our Record Review Solutions from All Angles  Infrastructure  Invest $15 billion across the  Record of managing costs  Commercial planning period  $550 million in merger  Policy  Upgrade aging infrastructure synergies  Legal  Invest in infrastructure and new  Reduced 2013 ExGen O&M by technologies $150 million  Provide stable earnings growth  CENG annual projected synergies of $50-70 million (1) Scenarios for Optimization ExGen Continued Focus  Cost and productivity  Invest in renewables and  Expand cost management enhancement expand footprint in the natural efforts  Operations improvement gas business to diversify  Efficiency gains through  Transmission  Maintain retail pricing discipline productivity and technology  PPAs  Bolster presence in core regions enhancements  Sale  Research and invest in  Share best practices across the  Retirement emerging technologies utilities We are biased towards action while we leverage our competencies and strengths to influence our financial future (1) At 100% ownership, Exelon share is 50% 3 2013 EEI Conference

Advocating for Public Policy to Enhance Customer and Shareholder Value Regulatory / Policy Actions Market Policy Federal Policy State Policy PJM : Subsidies: Oppose Subsidized Generation:  Engaged in stakeholder process  Leading voice against extension  IL: Defeated Taylorsville Energy regarding PJM reliance on of the Production Tax Credit and Project Subsidy legislation planned resources other electric generation  MA: Opposed Footprint Power  Minimum Offer Price Rule subsidies Subsidy legislation (MOPR) Reform  NJ: Won LCAPP Court decision  Demand Response Reforms EPA Regulations:  Mercury and Air Toxics Infrastructure & Ratemaking ERCOT : Standards (MATS) Improvements: • Resource adequacy  Greenhouse gases (new and  IL: Energy Infrastructure and existing sources) Modernization Legislation New England:  316(b) (Senate Bill 9) • Energy and capacity market  MD/PA: Policies to speed reforms recovery for gas and infrastructure investments RGGI: • New Model Rule 4 2013 EEI Conference

Investing in a Stronger Future Core Strength Strategic Focus and Actions Solid financial footing and investment grade credit rating will allow us to Strong ong Balanc ance e Sheet et grow in challenging times. Significant infrastructure and technology enhancements under Utili lity ty Investm stmen ent regulatory structures that allow a fair rate of return. Generating fleet will continue unwavering focus on world class Oper eratin ating Excelle ellence performance. Disciplined fleet evaluation will drive strategic decisions to unlock value, Asset t Optimization ization improve cash flow and grow earnings. Enhance the value of our portfolio through implementation of our Portf tfoli olio o Managem agement fundamental view and disciplined retail pricing. Advocate for policies that strengthen competitive markets, limit Well-Crafted ed Public ic Policie ies subsidies and enhance the value of clean generation. 5 2013 EEI Conference

Financial Update

2013 Operating Earnings Guidance $2.35 - $2.65 (1) $2.40 - $2.60 (1) $0.15 - $0.25 $0.20 - $0.25 Key Drivers of Change $0.35 - $0.45 $0.40 - $0.45 in Full-Year Guidance $0.35 - $0.45 $0.45 - $0.50 • Strong YTD earnings through Q3 • Lower than expected ExGen gross margin largely offset by O&M savings $1.40 - $1.60 $1.40 - $1.50 • Delay of AVSR project • Lower storm costs at utilities 2013 Prior Guidance 2013 Revised Guidance (prior to 3Q earnings call) (disclosed at 3Q earnings call) BGE ComEd BGE ComEd PECO ExGen PECO ExGen (1) Earnings guidance for OpCos may not add up to consolidated EPS guidance. Refer to slide 15 for a list of adjustments from GAAP EPS to adjusted (non-GAAP) operating EPS. 7 2013 EEI Conference

Capital Expenditure Expectations Exelon n Utiliti ties Exelon n Generati tion (1) (1) (in $M) (in $M) 3,100 2,725 3,025 2,950 150 300 50 2,400 225 2,350 450 2,625 75 225 150 25 250 500 50 2,075 225 125 25 450 25 100 200 150 25 50 100 75 850 25 725 100 200 700 100 75 575 1,000 950 900 1,050 1,750 1,725 1,650 1,400 950 900 875 750 2013 2014 2015 2016 2013 2014 2015 2016 Smart Grid/Smart Meter Electric Transmission Nuclear Uprates MD Commitments Gas Delivery Electric Distribution Upstream Gas Fukushima Response (2) Solar Nuclear Fuel Wind Base Capex (1) Excludes CENG (2) Fukushima Response spend excludes Salem, which is included in Base CapEx 8 2013 EEI Conference

2013 Projected Sources and Uses of Cash Exelon ( 6) ($ in millions) BGE ComEd PECO ExGen As of 2Q13 Delta Beginning Cash Balance ( 1) 1,575 1,575 -- -- Cash Flow from Operations (2) 575 1,075 650 3,550 5,775 5,550 225 CapEx (excluding other items (500) (1,300) (375) (1,000) (3,275) (3,300) 25 below): Nuclear Fuel n/a n/a n/a (1,000) (1,000) (1,000) -- Dividend (3) (1,250) (1,250) -- Nuclear Uprates n/a n/a n/a (150) (150) (150) -- Wind n/a n/a n/a (25) (25) (25) -- Solar n/a n/a n/a (500) (500) (550) 50 Upstream n/a n/a n/a (50) (50) (50) -- Utility Smart Grid/Smart Meter (125) (150) (175) n/a (450) (450) -- Net Financing (excluding Dividend): Debt Issuances 300 350 550 -- 1,200 1,200 -- Debt Retirements (4) (400) (250) (500) (450) (1,600) (1,600) -- Project Finance/Federal Financing n/a n/a n/a 850 850 1,025 (175) Bank Loan -- Other (5) 75 350 (75) (125) 325 300 25 Ending Cash Balance ( 1) 1,425 1,275 150 150 (1) Exelon beginning cash balance as of 1/1/13. Excludes counterparty collateral activity. (2) Cash Flow from Operations primarily includes net cash flows provided by operating activities and net cash flows used in investing activities other than capital expenditures. (3) Dividends are subject to declaration by the Board of Directors. (4) Includes PECO’s $210 million Accounts Receivable (A/R) Agreement with Bank of Tokyo and excludes BGE’s current portion of its rate stabilization bonds (5) “Other” includes proceeds from options, redemption of PECO preferred stock and expected changes in short-term debt, including money pool activity. (6) Includes cash flow activity from Holding Company, eliminations, and other corporate entities. 9 2013 EEI Conference